Big Fish Games Discloses Mobile Gains

Big Fish Games is starting to see the fruits of an effort to steer its business toward mobile devices, charting a path other companies are struggling to navigate.

The closely held Seattle, Wash., videogame maker says its gross mobile revenue doubled over the past year to $120 million in 2013. Perhaps more importantly, mobile device games rose as a percentage of the company’s sales, representing 45% of the company’s $266 million gross revenue; in 2012, mobile device revenue represented almost 27% of the company’s $225 million in gross revenue.

Big Fish says it rang up “bookings,” or sales including deferred revenue and other items, of $279 million, up 18% from a year earlier. The company says it has increased profits at a double-digit rate for 11 consecutive years, without providing dollar figures.

Paul Thelen, Big Fish’s chief executive, attributes the success to rapid changes in strategy. His company has shifted from relying on selling PC games to offering games for mobile devices to customers for free, then charging for additional abilities and features. Those types of games are known in the industry as “free to play.”

(For example, gamers can download “Big Fish Casino” and play the included slots, blackjack and other games for free. But if they run out of chips, players can pay $1.99 to buy a big stack or wait for a day until more chips are automatically created in their account. For some other titles, Big Fish tends to offer free downloads of the beginning of a game, charging to access the rest of it as players progress).

Making it free to play games requires different skills from making a typical title, Thelen says. “A lot of game designers have an aversion to free to play, so when they do switch over they learn they have to get rid of everything they knew about game design,” he says.

Big Fish’s purported successes with mobile device games could indicate a positive future for other game makers that have struggled with that transition.

Companies such as Zynga that built franchises around online games played on PCs through a Web browser have been grappling with the large swaths of customers that have switched their attention to smartphones and tablets, causing revenues to fall. Those that do make successful mobile titles find that they rarely pull in as much money as a game on PCs or videogame consoles.

Big Fish has had its own share of struggles. For example, a service called “Big Fish Unlimited”–which was designed to stream PC-style games over the Internet to customers with tablets, set-top boxes and other devices–found little traction and was shut down.

The company released its first mobile game in 2008, largely adapting titles from PCs for smaller screens. But Thelen says the effort had added struggles.

When the company began changing its business model to adopt free to play games, it learned they can take up to twice as long to develop as a standard title, because of the effort it takes to make extra downloadable features worth buying.

In 2012, Big Fish released three free to play games, and last year it launched five. This year, it plans to release more than 20. Between 40% and 50% of Big Fish customers play free titles, the company said. And Big Fish’s mobile game efforts have become profitable, Thelen says.

Another needed trait is patience. A Big Fish casino game for mobile devices was available for 24 months before it hit the top spot in its genre, Thelen says. Another title, a card game called “Fairway Solitaire,” took 18 months to break through the top spots. That required Big Fish to create games that are compelling enough for people to play for many months.

Thelen says he isn’t giving up on PC customers with his push to mobile, however. His company is maintaining its efforts for computers. “We have a very profitable business on PCs,” he says.